Growers, tyre companies at odds over port waivers for natural rubber

Rubber growers, bogged down by poor price realisation, are agitated over the Centre easing port restrictions for NR (natural rubber) imports under AAS (Advanced Authorisation Scheme of imports for exports).

Rubber growers, bogged down by poor price realisation, are agitated over the Centre easing port restrictions for NR (natural rubber) imports under AAS (Advanced Authorisation Scheme of imports for exports).

Rubber growers, bogged down by poor price realisation, are agitated over the Centre easing port restrictions for NR (natural rubber) imports under AAS (Advanced Authorisation Scheme of imports for exports). However, the rubber-consuming tyre industry is quick to welcome the Union commerce ministry’s move. “This would help only the tyre firms and not the farm economy. On the other hand, over 10 lakh rubber farmers are left at doldrums, when they are going through the worst price realisation crisis in recent memory,” Siby Monipally, Secretary, IRGA (Indian Rubber Growers Association) told FE. Earlier only Nava Sheva (Mumbai) and Chennai were designated as entry ports for NR imports. The relaxation allows tyre makers to import the large quantity of NR and advance authorisation gives them six months’ time to export the final product.

Rubber growers are apprehensive that this would increase the quantum of imports and result in fall in prices. “Despite our pleas not to include Chennai Port, around which most tyre factories are located, they have done just that. This will have an immediate impact on local prices,” said PC Mony, an office-bearer of Rubber Nursery Owners’ Association. Tyre manufacturers, meanwhile, have welcomed the relaxations on port restrictions. “The decision would certainly enhance India’s export competitiveness in rubber products,” said Rajiv Budhraja, director general, ATMA ( Automative Tyre Manufacturers Association). Although the easing of port restrictions have been to the benefit of the consuming industry, the tyre firms are hardly satisfied. The move “only partly addressed the industry’s expectation on removal of port restrictions for all rubber imports,” said Budhraja.

The industry quotes Rubber Board data showing a production-consumption gap of 4.7 lakh tonne for the current fiscal, to argue that domestic rubber availability scenario is getting dimmer. According to Budhraja, it’s the tyre industry that’s suffering the policy squeeze. “The customs duty on NR imports is at 25%, much higher than the rate of duty levied by any other rubber importing country. The tyre industry needs to adhere to pre-import conditions for rubber imports against (tyre) export obligations. Further, the export obligation period (for tyres) has been reduced from 18 months to only 6 months,” he said. Meanwhile, the plantations are abuzz with fears of insufficient infrastructure to check the quality of rubber imported at cheap rates from South East Asia and Africa. Earlier, microbiology experts had cautioned that imports of low quality rubber to India could end up as imports of microbes triggering devastating diseases that India is so far unacquainted to. “Some countries do not have adequate phyto-sanitary infrastructure to handle the transit of microbe-free rubber,” said Dr Jacob Mathew, former director, Rubber Board of India.